My op-ed on why trade deficits matter (“Why the White House Worries About Trade Deficits,” March 6) has generated a healthy debate. However, your March 10 lead editorial implausibly asserts, “Perhaps the best way to think about the U.S. trade deficit is not to think about it.”
[Peter Navarro| March 22, 2017 |The Wall Street Journal]
As for the March 13 letters: Cato’s Dan Ikenson’s insistence that trade deficits don’t matter fits neatly into other key elements of his Alice-in-Wonderland worldview, e.g., currency manipulation is not worth trying to remedy, antidumping law is a “vice” that does “not ensure a level playing field,” and the World Trade Organization dispute settlement process shows no “anti-American bias.”
Pinar Wilber’s red herring reference to the Smoot-Hawley tariffs to defend a free-trade theory with no basis in reality is seven degrees removed from the abandoned factories of Ohio, Michigan and Pennsylvania.
Desmond Lachman’s tired insistence that savings and investment patterns is the only thing that drives trade deficits rather than mercantilist policies ignores obvious general equilibrium effects. For example, if India agrees to lower its tariffs on Harley Davidsonmotorcycles, Indian consumers will buy more Harleys and save less while Harley will sell more Harleys and invest more. Truly fair and reciprocal trade between the U.S. and its trading partners, rather than the perpetual turn of the screw we receive now, will lead to a thousand similar kinds of adjustments as our bilateral trade deficits fall and savings and investment patterns adjust.